Brazil's clean leadership here to stay
Wind energy has arrived in Brazil to stay. Within four years, the amount of installed wind capacity will have multiplied sixfold, rising from 2.2GW at the end of 2013 to 13.6GW in 2018, thanks to more than 500 projects already in operation, contracted or under construction.
A further 9GW of contracts are expected to be awarded by 2023, which would take the sector past 22GW.
It has been an incredible success story, achieved in a remarkably short period. Wind has shown the fastest growth rate of any Brazilian energy source over the past few years. This can be attributed to a combination of factors related to the global situation, technology development and the supply chain, as well regulatory and financial circumstances, not to mention natural resources.
In relation to this last aspect, Brazil has significant potential, with suitable wind speeds for energy generation across the country.
One of the most interesting points in wind’s favour is that its “seasonality” fits perfectly with that of Brazil’s main energy source, hydropower. In the southern region, as in the Northeast, which hold the greatest potential, the winds are stronger in the second half of the year, which is when the main rivers of the Southeast, Northeast and North are at their lowest levels and hydroelectricity production is at its weakest. So the two power sources are perfectly complementary.
Another key driver for the domestic wind industry is the competitive model for contracting energy. Our auction system encourages generators to lower their prices, making visible the real cost of wind projects, which in turn encourages the reduction of turbine manufacturing costs.
Brazil’s energy mix is already one of the greenest in the world. Even with a dry year like 2013, renewables accounted for more than 80% of our electricity. The organisation I head — the EPE, the national energy planning authority — estimates that power demand will grow by 50% over the next ten years, fuelled by population growth, rising per-capita income and a strong expansion of commercial and service activities.
To meet this increased demand, capacity will need to expand by 57%, from 125GW in December 2013 to around 196GW in 2023. Of this 71GW of additional capacity, 37GW has already been contracted. A further 34GW will have to be awarded, mostly in the tenders that will be held by 2018.
Hydropower will continue to be the principal source of generation, but with a slower growth rate than it has enjoyed to date, increasing from 86GW to 117GW in 2023. Other renewable sources (wind, biomass, small hydro and solar) will win an increasingly large share, with growth of about 30GW over the next decade — almost three times their installed capacity last year.
In the case of biomass, the most important projects are those that use sugar-cane bagasse. By 2023, the plan is for a 4.1GW increase in capacity. It is worth pointing out, however, that the investments necessary for biomass development are subject to the volatility of the sugar alcohol sector, which could eventually impede biomass’ ability to grow, undermining its competitiveness in auctions compared with other sources.
Solar energy will arrive in a significant way with the reserve auction in October this year. Although its current installed capacity is small, the forecast is that from 2017, some 3.5GW will be installed, allowing solar to repeat the success of the wind sector, which has become a reference case that is studied by other countries.
Thanks to wind’s strong growth, Brazil will maintain — or even expand — the high proportion of renewables in its electricity matrix.
Maurício Tolmasquim is president of the EPE, Brazil’s energy planning authority
This piece was published as part of the Thought Leaders series. Recharge’s Thought Leaders Club brings together leading thinkers and participants from the renewable-energy sector to examine the key challenges facing our industry